Hungary watchdog fines Deutsche Bank for FX deals

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BUDAPEST, April 22 (Reuters) – Hungary’s financial market regulator PSZAF has fined Deutsche Bank London 90 million forints ($458,100) for high volume spot forint foreign exchange transactions on Oct. 15, 2008 which weakened the exchange rate, the watchdog said on Thursday.
It said the spot deals were linked to some forex swap positions Deutsche had opened from 2007 with several Hungarian banks.
It said the transactions took place during a sensitive period for the domestic markets and Deutsche “attempted to use the consequences of its spot foreign exchange market transactions to influence its counterparties in the outstanding foreign exchange linked swap positions.”
“The risk management needs originating from the existing foreign exchange linked swap positions had not justified the sale of spot HUF on the foreign exchange market in such volume as DBL executed on 15 October 2008,” it said in a statement.
The watchdog also said that Deutsche’s full cooperation during the investigation and the fact that it did not realise financial gains from the deals were “mitigating circumstances”. ($1=196.45 Hungarian Forint) (Reporting by Krisztina Than and Gergely Szakacs; Editing by Hans Peters)
((krisztina.than@thomsonreuters.com; tel +36 1 327 47 45; rme krisztina.than@reuters.com.net))
Keywords: DEUTSCHE HUNGARY/FINE